The fine is in addition to penalties Davison faces when he is sentenced in June after pleading guilty to two federal securities fraud charges. Any court-ordered restitution paid by Davison will reduce the level of the fine, according to the state agreement.
Morrison said Davison will have 10 years, not counting any time spent in prison, to pay the fine and will be permanently banned from selling securities in Montana.
One of Davison's former employers, UBS Financial Services, earlier reached an agreement to pay Davison's clients more than $4.5 million in restitution.
Davison, a former Republican gubernatorial candidate, signed the settlement earlier this week. While he awaits sentencing he has been living in Medford, Ore., and working at his brother-in-law's car dealership.
Davison's attorney, Jay Lansing, declined comment. A phone message left for Davison at Crater Lake Ford was not immediately returned.
The state had the authority to seek fines of $5,000 for each violation it found in looking at Davison's scheme to defraud investors between June 1995 and July 2006. The $250,000 total fine is the largest levied by state regulators, the auditor's office said.
“This is the biggest fine we have ever levied on an individual in a securities case,” said Roberta Cross Guns, an attorney with the auditor's office.
Davison admitted putting investors' money into fake accounts to cover his stock market losses. He used money from new investors to try to pay previous investors.
Davison, 49, served on the Montana Board of Regents from 1993-2000. He ran for the Republican nomination for governor in 2004 but lost in a four-way primary. He served as Montana finance chairman for former Sen. Conrad Burns, R-Mont., until he resigned last July.
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